Fidelity Nationwide Monetary chairman faces opposition at funding firm
Cannae Holdings Inc., the funding firm led by Fidelity Nationwide Monetary (FNF) founder and Chairman William Foley II, is coping with accusations of miserable governance and an absence of strategic focal point from activist investor Carronade Capital Management.
Carronade parts to actions it claims have contributed to a loss of practically $1 billion in shareholder mark. The firm holds 2.9 million shares in Cannae and took its grievances public with a most modern regulatory filing and a letter launched Thursday.
The letter criticizes Cannae’s “vague and undifferentiated” funding capability and condemned most modern board actions. These consist of an accelerated equity vesting belief for directors if they devise no longer appear to be reelected and a requirement for Cannae to repurchase half of Foley’s shares “at a essential top fee to market prices.”
“We predict about this offensive action trounces shareholder rights and the Board’s fiduciary tasks and further disenfranchises the Firm’s honest appropriate owners,” the letter said. “It additionally makes sure to us that Cannae has no longer been partaking in ethical faith dialogue despite our persistent and staunch efforts, which necessitated the necessity to launch this letter with the goal of reaching your complete Board and building a market consensus on basically the most attention-grabbing direction ahead for the Firm.”
Carronade used to be founded by investor Dan Gropper. It’s calling for Cannae to divest its holdings in publicly traded companies and focal point on bettering the performance and valuation of its non-public investments.
Gropper, along with firm partner and head of research Andy Taylor, added their signatures to the tip of the letter.
“No subject a handful of successful investments in the previous, the contemporary portfolio of non-public investments is consistently marked at mark, and the relaxation investments in public equities have destroyed roughly $900 million of mark,” the letter said.
A lack of strategic brotherly love and minimal portfolio disclosure have eroded investor self assurance, they added.
“There has been no sure funding fable for shareholders to rally at the back of, as we consistently hear Cannae described simply because the Bill Foley co-funding automobile,” the letter said.
Firm shares have struggled, declining nearly 50% over the final five years, according to Cannae’s 2024 annual file. The firm used to be segment of FNF until a proper separation in 2017.
Cannae suffered a high-profile setback in 2020 when it attempted to compose valid property details firm CoreLogic alongside Senator Investment Group LP. The companies were in the rupture outbid by Stone Point Capital and Insight Partners in a $5.9 billion deal.
Cannae responds to allegations
Cannae has defended its capability, saying it has taken steps to slash administration fees and better align executive incentives with shareholder pursuits by shifting compensation essentially to firm stock.
“The strategic belief the firm has already begun implementing will ship better long-term returns to our shareholders than the actions proposed by Carronade Capital,” Cannae said in its response.
Foley, who became Cannae’s CEO remaining 365 days, reaffirmed the firm’s commitment to its contemporary technique.
“Our Board of Administrators and administration crew stay dedicated to driving long-term mark advent, and the efforts taken to pause the Firm’s strategic belief is a reflection of that commitment,” he said in the firm’s response. “Importantly, we stay optimistic on the outlook for our portfolio companies and their essential embedded mark.
“We additionally stay taking into consideration returning capital to shareholders and will compose basically the most of capital from the sell-down of existing public portfolio firm holdings to further aquire back our stock, given our continued commitment to lower Cannae’s portion mark slash mark to earn asset mark (NAV).”
Basically essentially based on investor stress, Cannae has been restructuring its portfolio. The firm has raised $470 million thru most modern stock sales, including 10 million shares of Dun & Bradstreet for $101 million and 4 million shares of Dayforce for $264 million.
Additionally, Cannae has returned $738 million to shareholders over the final four years, repurchasing 35% of its general stock with authorization to buy back one more 12.3 million shares.
Proxy combat ahead
Carronade has notified Cannae of its intent to nominate four honest directors at the firm’s 2025 annual assembly, atmosphere the stage for a heated proxy combat.
Gropper contends that Cannae’s deep trading slash mark referring to its NAV — averaging 40% under its asset mark — reflects a “failure in capital allocation, strategic planning, and governance oversight.”
“A well-managed firm with a strong asset inferior must clean no longer be trading at this kind of deep slash mark,” he wrote. “We predict about this misalignment parts to a failure in capital allocation, strategic planning, and governance oversight.”
